Monday, October 12, 2020

Treasurer Folwell Announces $400 Million Bond Sale Issued at 1.48% - Likely the Lowest Interest Rate in Modern Era

Oct 12, 2020

(Raleigh, N.C.) – State Treasurer Dale R. Folwell, CPA, through the State and Local Government Finance Division, announced today the sale of approximately $400 million of voter-approved General Obligation Public Improvement (Connect NC) Bonds. The sale is the fourth series authorized by the Connect NC Bond Act of 2015 ($2 billion total authorization) for universities, community colleges, local parks, infrastructure improvement and other projects. The total amount of interest to be paid over the 20-year life of the bonds is approximately $113 million. Prior to the 2020 issuance, the state issued $200 million in 2016, $400 million in 2018 and $600 million in 2019.

The bonds were purchased by Citigroup Global Markets Inc. at an all-in total interest rate of 1.48%.

“These are likely the lowest interest rates we’ve seen in the last century,” said Treasurer Folwell. “Continuing to have all three bond rating agencies affirm our ‘AAA’ rating is essential during this economically volatile time. This allows us to get very favorable rates, saving taxpayers millions of dollars. The credit goes to taxpayers who voted to approve and who actually pay for these bonds, and the General Assembly for its conservative fiscal management of the state’s finances. I’d also like to thank the staff at the State and Local Government Finance Division for their hard work on the sale.”

The bond sale comes just after all three major national rating agencies re-affirmed the state's “AAA” bond rating, noting the state’s strong economy, growing reserves and conservative fiscal management. North Carolina is one of only 13 states that have a “AAA” rating from all major rating agencies.

Treasurer Folwell agrees with every North Carolinian that by minimizing debt service costs, the state will have more funds available for teachers, law enforcement, roads and other core functions of state government.

S&P Global Ratings said North Carolina’s 2019-2020 budgetary environment is better than anticipated because of stronger-than-forecast economic activity compared to the state’s conservative forecasting, while Moody’s Investors Service noted the state’s diverse economy, a history of strong conservative fiscal practices, healthy reserves and low debt and pension burdens. Fitch Ratings referenced that North Carolina is well positioned to address economic downturns with an exceptionally strong ability to close budget gaps.

The N.C. Department of State Treasurer’s State and Local Government Finance Division handles the sale and delivery of all state and local debt and monitors the repayment of state and local government debt. More information can be found at